Anak Gas King, Inc., Plaintiff, v. Northville Industries Corp., Defendants. (2026)

Upon the following papers read on plaintiff's motion for summary judgment in its favor (Mot. Seq. 003) and defendant's cross-motion to dismiss the complaint (Mot. Seq. 004), NYSCEF e-filed documents numbered 46 through 65, and upon due deliberation and consideration given to the foregoing papers, the motions are decided as follows:

Plaintiff commenced this action on February 25, 2025, seeking a declaratory judgment (1) that the defendant Northville Industry Corp's ("Northville") time to commence an action to foreclose a purchase money mortgage has expired; and (2) for an order canceling and discharging the purchase money mortgage pursuant to Real Property Actions and Proceedings Law ("RPAPL") § 1501(4) (NYSCEF No. 1). Plaintiff also seeks dismissal of defendant's counterclaims. Issue was joined on May 30, 2025, wherein defendant asserted counterclaims for foreclosure of the purchase money mortgage and for breach of contract (NYSCEF Nos. 23-24).

Plaintiff purchased property used as a gas station located at 268 Higbie Lane, West Islip, New York from defendant on December 9, 1993 (see NSYCF No. 53). At the time of the closing there was an outstanding contamination on the property which defendant assumed responsibility to remediate in compliance with the requirements imposed by the New York State Department of Environmental Conservation ("NYSDEC"). Defendant agreed to remedy the contamination post-closing. The purchase price was $483,333.00. After cash payments towards the purchase price, the balance of $410,00.00 was paid in the form of a purchase money mortgage held by defendant (see NYSCEF No. 54-55). The mortgagor was required to make monthly payments for 6.5 years followed by a balloon payment of the outstanding balance. Plaintiff duly executed and delivered to defendant said mortgage for the premises indexed in the Suffolk County Tax Map as District 0500, Section 436.00, Block 01.00, Lot 042.000. The mortgage contained an acceleration clause in the event of a default in making the required payments. As noted above, defendant agreed to perform environmental remediation of the premises to the satisfaction of the NYSDEC, which was obtained on July 17, 1998, pursuant to notification from NYSDEC (see NYSCEF No. 56).

In July 1999, plaintiff ceased making payments on the mortgage, including the final balloon payment. On July 8, 2000, defendant notified plaintiff of its default and timely filed a notice of pendency and commenced a foreclosure action in the Supreme Court, Suffolk County on July 28, 2000 (the "foreclosure action"). Plaintiff answered and counterclaimed, alleging that defendant had not adequately remediated the premises as required by the contract of sale. In 2001, having been notified of the existence of contamination on the premises, NYSDEC rescinded its prior approval from 1998 and re-opened both the prior spill file as well as opened two new spill files in which plaintiff and defendant herein were named as dischargers (see NYSCEF No. 9).

While the foreclosure action was pending, New York State commenced an action in 2007 which named both plaintiff and defendant as parties and concerned the remediation of the contamination on the subject property (the "environmental action"). In December of 2008, plaintiff and defendant entered into a stipulation of discontinuance of the foreclosure action without prejudice. Specifically, the stipulation provides that the action pending in Supreme Court, Suffolk County, Index No. 19052/2000 is "discontinued without prejudice to plaintiff's (Northville's) right to re-commence this action or otherwise re-assert the claims made and relief sought in this action in the context of another proceeding, and defendant Anak Gas King, Inc.'s right to re-assert the counterclaim therein." It was further agreed therein "that the re-commencement or re-assertion of plaintiff's claims and requests for relief in a new action or other proceeding shall relate back to their assertion in this action and will be deemed timely. Defendants shall not assert any statute of limitations defenses with respect to plaintiff's re-asserted claims and requests for relief." The same stipulation applied to Anak Gas King, Inc.'s counterclaim. Finally, the parties agreed "that all rights and defenses of the parties with respect to plaintiff's claims and defendant's counterclaim in this action, which existed prior to the execution of this Stipulation, are hereby preserved, and shall be available in any action or proceeding that re-asserts said claims and/or counterclaim to the same extent as they were available in this action." The Stipulation is dated December 5, 2008, and was so ordered by Justice Ralph Costello on December 8, 2008 (see NYSCEF No. 13).

On April 19, 2019, the State of New York discontinued the environmental action it had commenced in 2007 and released its lien on the subject property after plaintiff had completed the required remediation at its sole expense. While there is an indication that the parties may have had intermittent discussions regarding these issues, no legal action or proceeding was commenced until plaintiff filed this action on February 24, 2025.

Plaintiff moves for summary judgment alleging that the statute of limitations on plaintiff's right to foreclose on the purchase money mortgage expired. Plaintiff claims that plaintiff's time to assert its claim for foreclosure and breach of contract expired six-years from the date of the stipulation discontinuing the foreclosure action on December 8, 2008. Plaintiff also seeks summary judgment dismissing defendant's counterclaims. Defendant cross-moves for summary judgment alleging that the December 8, 2008, stipulation was a binding agreement by the parties to waive the statute of limitations indefinitely as a defense and therefore there was no time limit within which defendant had to commence an action to foreclose on the purchase money mortgage.

The precise issue in this case is whether under existing statutory and caselaw, parties may, by stipulation discontinuing a foreclosure action without prejudice, agree to an indefinite extension of the time within which to re-commence a new foreclosure action.

The statute of limitations for commencement of a foreclosure action is six years (see CPLR § 213[4]). This time period is measured from the date each payment is due or from the date of acceleration of the entire amount due based upon a default in payment. Acceleration can occur by a notice to the mortgagor or by commencement of a foreclosure action which unequivocally demands payment in full based upon a default, as authorized by the terms of the purchase money mortgage.

Effective December 30, 2022, the Foreclosure Abuse Prevention Act ("FAPA") (L 2022, ch 821) became law. Under this law, "the voluntary discontinuance of such action [foreclosure], whether on motion, order, stipulation or by notice, shall not, in form or effect, waive, postpone, cancel, toll, extend, revive or reset the limitations period , unless expressly prescribed by statute" (codified at CPLR § 3217[e]). The constitutional validity of the retroactive application of FAPA was upheld in Van Dyke v U.S. Bank, National Association(45 NY3d 461, 473-480 [2025]). This Court notes that the parties do not dispute the retroactive effect of FAPA. Thus, FAPA made unilateral action by the mortgagee to re-set the statute of limitations ineffective; FAPA did not prohibit the parties from mutually agreeing to waive the statute of limitations.

General Obligations Law ("GOL") § 17-105 applies to the stipulation before this Court. GOL § 17-105(1) provides that a waiver of the expiration of the statute of limitations is valid under certain conditions: "by the express terms of a writing signed by the party to be charged is effective, subject to any conditions expressed in the writing, to make the time limited for commencement of the action run from the date of the waiver or promise." Thus, the parties could stipulate by agreement to discontinue the pending foreclosure action and agree that the statute of limitations would be re-set from the date of the stipulation. Here, defendant Northville asks the court to interpret the stipulation to mean that the statute of limitations was waived, meaning that there was no statute of limitations in effect, leaving it open-ended as to when Northville could re-commence the foreclosure action against plaintiff.

Northville relies upon GOL § 17-105(5) to support its contention. In pertinent part, this statute states: "5. This section does not change the requirements or the effect with respect to the accrual of a cause of action, nor the time limited for commencement of an action based upon . b. a stipulation made in an action or proceeding." Relying on HSBC Bank USA, N.A. v Nicholas (255 NYS 3d 43 [1st Dept 2026]), Northville argues that the stipulation in this case having been made in the first foreclosure action, the maximum time limitation of six years from the date of the waiver set forth in § 17-105(1) does not apply.

In HSBC Bank USA, N.A., supra, the parties had executed a stipulation agreeing to toll the statute of limitations from July 22, 2008, until June 1, 2013. The foreclosure action was then re-commenced on February 16, 2018. The court held that the parties' stipulation had the effect of tolling the statute of limitations to run from June 1, 2013. Thus, the mortgagee had six years from that date to re-commence a foreclosure action, making the February 16, 2018, date of commencement timely.

The HSBC Bank, USA, N.A. court also held that because the parties' stipulation was made in the context of a pending foreclosure action, it was exempt from GOL § 17-105(1), which required the statute of limitations to be no more than six years from the date of the parties' agreement (see HSBC Bank, USA, N.A., supra, at 46). Instead, the court held that GOL § 17-105(5) applied to the waiver of the statute of limitations by stipulation in an action or proceeding, meaning the parties were free to extend the statute of limitations beyond six years from the date of the stipulation.

In the case at bar, the stipulation was made by agreement in a pending foreclosure action. Unlike the facts in HSBC Bank USA, N.A. v. Nicholas, supra, the parties herein neglected to select a date when the statute of limitations would re-start. The parties to this action therefore did not bind themselves to a statute of limitations beyond six years from the date of the stipulation. To find that the statute of limitations was waived indefinitely as urged by Northville, would construe the omission of date on which the statute of limitations would re-set to mean that the parties' mutual intention was to give Northville an unlimited time period in which to re-commence the foreclosure action. This Court finds in the first instance that in the event of an omission such as this, the time period in which to re-commence the statute of limitations defaults to the 6-year statute of limitations imposed in CPLR § 213(4). This is in harmony with the limitation set in GOL § 17-105(1), which provides that the statute of limitations runs from the date of the stipulation. This Court interprets the holding in HSBC Bank USA, N.A. to mean that the parties' can agree to a stipulation made in an action that would re-start the 6-year statute of limitations beyond six-years from the date of the stipulation, and that in such circumstance, there is an exemption from GOL § 17-105(1), which mandates the statute of limitations to be no greater than six-years from the date of the stipulation.

This Court also finds that defendant Northville's argument that it was free to re-commence the litigation without regard to any period of limitations to be inconsistent with and contrary to "the strong public policy favoring finality, predictability, fairness and repose served by statutes of limitations" (see Matter of Regina Metro. Co., LLC v New York State Div. of Housing & Community Renewal, 35 NY3d 332, 372 [2020]; Van Dyke v U.S. Bank, N.A., 45 NY3d 461, 477 [2025]; U.S. Bank, N.A. v Gordon, 247 AD3d 423, 425 [1st Dept 2026]; Federal National Mortgage Association v Marshall, 246 AD3d 1234, 1235 [3d Dept 2026]).

For the reasons set forth herein, this Court finds that the December 8, 2008, stipulation had the effect of re-setting the six-year statute of limitations (CPLR § 213[4]) and that the stipulation did not alter the statute of limitations itself. Thus, defendant lost the right to enforce the purchase money mortgage by failing to re-commence a foreclosure action no later than December 8, 2014.

Accordingly, it is hereby

ORDERED that plaintiff's motion for summary judgment for the relief requested in the complaint and for dismissal of counterclaims (Mot. Seq. 003) is granted and defendant's cross-motion to dismiss the complaint (Mot. Seq. 004) is denied; and it is further

ORDERED that pursuant to CPLR § 3001, plaintiff Anak Gas King, Inc., is granted a declaratory judgment that the purchase money mortgage defendant Northville holds on the premises known as 268 Higbie Lane, West Islip, County of Suffolk, State of New York, recorded in the office of Suffolk County Clerk on January 10, 1994, in Liber 18756, Page 678, be and the same is hereby cancelled and discharged pursuant to Real Property Actions and Proceedings Law § 1501(4); and it is hereby

ORDERED that the Suffolk County Clerk is directed to cancel and discharge the lis pendens and the aforesaid mortgage filed with respect to real property identified on the Suffolk County Tax Map as District 0500; Section 436.00; Block 01.00; Lot 042.000; and it is further

ORDERED that plaintiff is directed to serve a copy of this order with Notice of Entry upon the Suffolk County Clerk.

The foregoing constitutes the decision and Order of the Court.

Dated: September 10, 2026

Riverhead, New York

E N T E R:

Hon. James F. Matthews, JSC

James F. Matthews, J.